I run Virtual Villagers in Windows Vista and don't have any problem with the game saving properly. Windows Vista is more particular than Windows XP about how you set up programs and what permissions they have, so you may need to refer to the Windows Vista help files for assistance. If you're not running it in an administrator account, you might try right-clicking the game icon and selecting "Run as administrator" to see if that helps.

If you want to uninstall the game and reinstall it, you can use the procedure in this post to back up your savegames while you uninstall and reinstall Virtual Villagers.